Information received since the Federal Open Market Committee met
in September suggests that economic activity has
continued to expand at a moderate pace in recent
months. Growth in employment has been slow, and
the unemployment rate remains elevated. Household spending
has advanced a bit more quickly, but growth in business fixed
investment has slowed. The housing sector has shown some
further signs of improvement, albeit from a depressed
level. Inflation recently picked up somewhat,
reflecting higher energy prices. Longer-term
inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to
foster maximum employment and price stability. The
Committee remains concerned that, without sufficient policy
accommodation, economic growth might not be strong enough to
generate sustained improvement in labor market conditions.
Furthermore, strains in global financial markets continue to pose
significant downside risks to the economic outlook. The
Committee also anticipates that inflation over the medium term
likely would run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that
inflation, over time, is at the rate most consistent with its
dual mandate, the Committee will continue purchasing additional
agency mortgage-backed securities at a pace of $40 billion per
month. The Committee also will continue through the end of
the year its program to extend the average maturity of its
holdings of Treasury securities, and it is maintaining its
existing policy of reinvesting principal payments from its
holdings of agency debt and agency mortgage-backed
securities in agency mortgage-backed securities.
These actions, which together will increase the Committee’s
holdings of longer-term securities by about $85 billion each
month through the end of the year, should put downward pressure
on longer-term interest rates, support mortgage markets, and help
to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on
economic and financial developments in coming months. If
the outlook for the labor market does not improve substantially,
the Committee will continue its purchases of agency
mortgage-backed securities, undertake additional asset purchases,
and employ its other policy tools as appropriate until such
improvement is achieved in a context of price stability. In
determining the size, pace, and composition of its asset
purchases, the Committee will, as always, take appropriate
account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price
stability, the Committee expects that a highly accommodative
stance of monetary policy will remain appropriate for a
considerable time after the economic recovery strengthens.
In particular, the Committee also decided today to keep the
target range for the federal funds rate at 0 to 1/4 percent and
currently anticipates that exceptionally low levels for the
federal funds rate are likely to be warranted at least through
mid-2015.